9 ms·

The most interesting part of the HN discussion is not about the definition of what Amazon is doing, but the occasional misunderstanding of how large brick and m

by nataz 5y ago

The most interesting part of the HN discussion is not about the definition of what Amazon is doing, but the occasional misunderstanding of how large brick and mortar retail businesses operate at scale (see: buying shelf space/payment dependant on sales/etc). There are lots of folks on here that understand what Amazon is doing, less who understand retail businesses mechanisms. I'm not sure what Amazon is doing is legal (def will vary widely between the eu and us markets), but it is another interesting example of how doing something at scale can be perceived as fundamentally different then when it's done in a smaller way (especially as it pertains to privacy).

addicted 5y ago
It's less doing it at "scale" and more doing it as a monopoly/monopsony. Walmart has faced similar questions as well, but as much of a monopoly/monopsony as Walmart is, it's far less than what Amazon is. Moreso in non US advanced countries that actually enforce the anti trust regulations in their laws.
- deleted 5y ago
  [deleted]
- TameAntelope 5y ago
  In what market is Amazon a monopoly?
  - dahfizz 5y ago
    Being strict about the term, none. But "monopoly" has become a colloquialism for "big company (that I don't like)". Amazon has certainly generated enough bad faith and operates at a large enough scale to galvanize the anti-trust advocates
  - kempbellt 5y ago
    They are popular, efficient, and usually affordable - if not cheaper than many competing outlets, but I do not see them as a monopoly by definition. Amazon has made it more convenient to use their services than their competition in many ways, but to my understanding, there are alternatives for just about everything they offer.
- judge2020 5y ago
  > Moreso in non US advanced countries that actually enforce the anti trust regulations in their laws. I think it's pretty disingenuous to say that the U.S. isn't enforcing its antitrust laws, the DOJ certainly opens investigations against these conglomerates, they just don't take them to court, so there might not be enough info for the DOJ to think there's a case. We don't know the full story for any of these cases and thus can't become sole arbitrators of whether or not something is an antitrust violation. The problem is probably that the DOJ doesn't like to bring cases against people in they they don't have hard evidence and a high likelihood to succeed in their prosecution - they have an average 92% success rate in the cases they bring against defendants[0]. I'm not one to say how to run the DOJ but chances are they could find more damning documents via court discovery (if they think they have enough of a case to get to discovery, at least). 0: https://www.justice.gov/doj/page/file/1249306/download#page=16 https://www.justice.gov/doj/page/file/1249306/download#page=... (page 16)
  - elliekelly 5y ago
    > The problem is probably that the DOJ doesn't like to bring cases against people in they they don't have hard evidence and a high likelihood to succeed in their prosecution It has nothing to do with a lack of evidence and everything to do with not biting the hands that feed the boss's next campaign fund.
    - lupire 5y ago
      The DOJ, SEC, etc have an army of non-politically-appointed civil servants.
      - elliekelly 5y ago
        And yet not a single non-politically-appointed civil servant at the DOJ has the actual authority to bring an action against a big company like Amazon. When the DOJ brings a major antitrust case against a major American company there is no chance it didn't get the Attorney General's, and probably the President's, sign-off first. None. Zero.
  - 5y ago
- sokoloff 5y ago
  > as much of a monopoly/monopsony as Walmart is, it's far less than what Amazon is. Walmart retail sales are significantly larger than Amazon's retail sales. For 2019 (chosen to avoid the disparate impact of pandemic), Walmart sold $514B while Amazon retail sold only $135B first-party and $200B third-party. Given the growth rates, Amazon will pass Walmart, but I don't think Walmart has "far less" power in retail than Amazon.
  - TameAntelope 5y ago
    This, and Walmart isn't just going to sit by and let Amazon win, why would they? I think folks on the Internet generally tend to assume Amazon is inevitable, but I doubt that's how Walmart thinks of it. Walmart and Amazon are both good for one another, and their competition helps us, except for when they basically non-compete over things like wages.
    - sokoloff 5y ago
      I agree about the internet/tech user part of that. If you asked me to give estimates of their relative size 5 years ago, I'd have probably said that Amazon was much bigger than Walmart, which would have been entirely wrong, of course. The pandemic was a huge boon for Amazon, but I don't think the battle for retail will have a clean, singular winner and consumers are endlessly demanding in terms of what it will take to remain the winner. Toys-R-Us and Sears learned that painful lesson within our adult lifetime. They won't be the last.
      - ethbr0 5y ago
        From a little bit of retail corporate experience: people are used to seeing Amazon roll over competitors with under-invested supply chains. There aren't really any of those left. Amazon taking on Walmart, Home Depot, or (I assume) Target is going to look very different. Because all have been shoveling money into their supply chain efficiencies for the last 10 years.
  - lupire 5y ago
    I think mail order and brick&mortar compete in some product segments, but are separate in others. For example, perhaps split off much of grocery and bulky cheap items as well as legally constrained products from WalMart's total (although Amazon is making inroads there).
- castlecrasher2 5y ago
  >but as much of a monopoly/monopsony as Walmart is, it's far less than what Amazon is I don't believe this to be the case. How is Amazon a monopoly, given the large number of online retailers that continue to be successful?
jorblumesea 5y ago
I don't think that's a fair comparison. It would be like if Amazon owned the entire mall, and would kick out competitors and establish their own stores once they become profitable. Amazon is both a retailer in the sense that they sell products, but also owns the entire marketplace as well.
- johnebgd 5y ago
  This. They are also so good at building malls that they own the construction company and the supply chain of raw goods for the construction efforts (AWS). They use their scale to cut costs for construction globally so it doesn't make economic sense for others to build without them. Even some of their competitors use their construction company to build their vision of what a mall looks like. All the while Amazon is gaining valuable insights they can steal to use on their own malls.
- Tinyyy 5y ago
  They don’t kick out competitors though, merely open up their own stores. To me (the consumer), that seems fine.
  - ska 5y ago
    To abuse this analogy further - if they also put signs for their owns stores in front of the other stores signage, or redesign the mall to direct people away from the competitors - that seems less fine.
    - savanaly 5y ago
      What if there's multiple other malls just across the street? As is the case in online retail. Even easier than crossing the street, to be honest, just click that second result in Google instead of the first. Is it so hard to admit that Amazon's customers are using them because their offering is great and not because of lack of alternatives?
      - lupire 5y ago
jiveturkey 5y ago
You seem to have a limited understanding as well. Unlike other retailers, who are front and center that they own the sales data (some even sell it back to you, the 3p merchant), Amazon explicitly states they will not use that data (except in aggregate). Bezos' statement that he cannot say for sure if the policy has been violated is an admission that it has, and is even encouraged. It's very possible and easy in fact to enforce a chinese wall around that data. That they have chosen not to -- that the data is possibly available at all -- means that they expect successful PMs to use it on the down low. It's clear they have this policy so as to attract merchants. So to turn around and violate it is a pretty severe issue. Second, Amazon is in a position to actually produce or re-brand products under their own very strong brand. Unlike other retailers whose store brand is always the discount and less desirable option, and generally not taking away sales from the premium product.
cmeacham98 5y ago
These comparisons to brick&mortar stores are mostly irrelevant. Amazon told 3rd party sellers it wouldn't use their sales data for its own sales (and possibly contractually agreed not to? - unsure here), and it now seems that they broke this promise. How other stores operate doesn't matter. Amazon said it wouldn't do this and used that trust to attract sellers and grow their platform.
- mjparrott 5y ago
  Companies break contracts all the time. The consequences range and can include legal action, hurt relationships, lost business ... but also could be minor ('business is business').
  - akira2501 5y ago
    > Companies break contracts all the time. Which is an excellent reason for preventing these types of monopolies from forming in the first place. Once you let one retailer get so large, they have almost unlimited power to act in this way, but the people who they harm have very little power in receiving any recompense for it. > The consequences range They sure do.. and Amazon is one of the largest companies operating today. The range is "off-scale high."
  - Gibbon1 5y ago
    There is breaking contracts in minor often mutually agreed ways, or because 'can't do it'. Happens all the time. Stealing your customers sales metrics, yeah that's never okay.

by nataz 5y ago

addicted 5y ago

It's less doing it at "scale" and more doing it as a monopoly/monopsony. Walmart has faced similar questions as well, but as much of a monopoly/monopsony as Walmart is, it's far less than what Amazon is. Moreso in non US advanced countries that actually enforce the anti trust regulations in their laws.

deleted 5y ago
[deleted]
TameAntelope 5y ago
In what market is Amazon a monopoly?
- dahfizz 5y ago
  Being strict about the term, none. But "monopoly" has become a colloquialism for "big company (that I don't like)". Amazon has certainly generated enough bad faith and operates at a large enough scale to galvanize the anti-trust advocates
- kempbellt 5y ago
  They are popular, efficient, and usually affordable - if not cheaper than many competing outlets, but I do not see them as a monopoly by definition. Amazon has made it more convenient to use their services than their competition in many ways, but to my understanding, there are alternatives for just about everything they offer.
judge2020 5y ago
> Moreso in non US advanced countries that actually enforce the anti trust regulations in their laws. I think it's pretty disingenuous to say that the U.S. isn't enforcing its antitrust laws, the DOJ certainly opens investigations against these conglomerates, they just don't take them to court, so there might not be enough info for the DOJ to think there's a case. We don't know the full story for any of these cases and thus can't become sole arbitrators of whether or not something is an antitrust violation. The problem is probably that the DOJ doesn't like to bring cases against people in they they don't have hard evidence and a high likelihood to succeed in their prosecution - they have an average 92% success rate in the cases they bring against defendants[0]. I'm not one to say how to run the DOJ but chances are they could find more damning documents via court discovery (if they think they have enough of a case to get to discovery, at least). 0: https://www.justice.gov/doj/page/file/1249306/download#page=16 https://www.justice.gov/doj/page/file/1249306/download#page=... (page 16)
- elliekelly 5y ago
  > The problem is probably that the DOJ doesn't like to bring cases against people in they they don't have hard evidence and a high likelihood to succeed in their prosecution It has nothing to do with a lack of evidence and everything to do with not biting the hands that feed the boss's next campaign fund.
  - lupire 5y ago
    The DOJ, SEC, etc have an army of non-politically-appointed civil servants.
    - elliekelly 5y ago
      And yet not a single non-politically-appointed civil servant at the DOJ has the actual authority to bring an action against a big company like Amazon. When the DOJ brings a major antitrust case against a major American company there is no chance it didn't get the Attorney General's, and probably the President's, sign-off first. None. Zero.
- 5y ago
sokoloff 5y ago
> as much of a monopoly/monopsony as Walmart is, it's far less than what Amazon is. Walmart retail sales are significantly larger than Amazon's retail sales. For 2019 (chosen to avoid the disparate impact of pandemic), Walmart sold $514B while Amazon retail sold only $135B first-party and $200B third-party. Given the growth rates, Amazon will pass Walmart, but I don't think Walmart has "far less" power in retail than Amazon.
- TameAntelope 5y ago
  This, and Walmart isn't just going to sit by and let Amazon win, why would they? I think folks on the Internet generally tend to assume Amazon is inevitable, but I doubt that's how Walmart thinks of it. Walmart and Amazon are both good for one another, and their competition helps us, except for when they basically non-compete over things like wages.
  - sokoloff 5y ago
    I agree about the internet/tech user part of that. If you asked me to give estimates of their relative size 5 years ago, I'd have probably said that Amazon was much bigger than Walmart, which would have been entirely wrong, of course. The pandemic was a huge boon for Amazon, but I don't think the battle for retail will have a clean, singular winner and consumers are endlessly demanding in terms of what it will take to remain the winner. Toys-R-Us and Sears learned that painful lesson within our adult lifetime. They won't be the last.
    - ethbr0 5y ago
      From a little bit of retail corporate experience: people are used to seeing Amazon roll over competitors with under-invested supply chains. There aren't really any of those left. Amazon taking on Walmart, Home Depot, or (I assume) Target is going to look very different. Because all have been shoveling money into their supply chain efficiencies for the last 10 years.
- lupire 5y ago
  I think mail order and brick&mortar compete in some product segments, but are separate in others. For example, perhaps split off much of grocery and bulky cheap items as well as legally constrained products from WalMart's total (although Amazon is making inroads there).
castlecrasher2 5y ago
>but as much of a monopoly/monopsony as Walmart is, it's far less than what Amazon is I don't believe this to be the case. How is Amazon a monopoly, given the large number of online retailers that continue to be successful?

jorblumesea 5y ago

I don't think that's a fair comparison. It would be like if Amazon owned the entire mall, and would kick out competitors and establish their own stores once they become profitable. Amazon is both a retailer in the sense that they sell products, but also owns the entire marketplace as well.

johnebgd 5y ago
This. They are also so good at building malls that they own the construction company and the supply chain of raw goods for the construction efforts (AWS). They use their scale to cut costs for construction globally so it doesn't make economic sense for others to build without them. Even some of their competitors use their construction company to build their vision of what a mall looks like. All the while Amazon is gaining valuable insights they can steal to use on their own malls.
Tinyyy 5y ago
They don’t kick out competitors though, merely open up their own stores. To me (the consumer), that seems fine.
- ska 5y ago
  To abuse this analogy further - if they also put signs for their owns stores in front of the other stores signage, or redesign the mall to direct people away from the competitors - that seems less fine.
  - savanaly 5y ago
    What if there's multiple other malls just across the street? As is the case in online retail. Even easier than crossing the street, to be honest, just click that second result in Google instead of the first. Is it so hard to admit that Amazon's customers are using them because their offering is great and not because of lack of alternatives?
    - lupire 5y ago

jiveturkey 5y ago

You seem to have a limited understanding as well. Unlike other retailers, who are front and center that they own the sales data (some even sell it back to you, the 3p merchant), Amazon explicitly states they will not use that data (except in aggregate). Bezos' statement that he cannot say for sure if the policy has been violated is an admission that it has, and is even encouraged. It's very possible and easy in fact to enforce a chinese wall around that data. That they have chosen not to -- that the data is possibly available at all -- means that they expect successful PMs to use it on the down low. It's clear they have this policy so as to attract merchants. So to turn around and violate it is a pretty severe issue. Second, Amazon is in a position to actually produce or re-brand products under their own very strong brand. Unlike other retailers whose store brand is always the discount and less desirable option, and generally not taking away sales from the premium product.

cmeacham98 5y ago

These comparisons to brick&mortar stores are mostly irrelevant. Amazon told 3rd party sellers it wouldn't use their sales data for its own sales (and possibly contractually agreed not to? - unsure here), and it now seems that they broke this promise. How other stores operate doesn't matter. Amazon said it wouldn't do this and used that trust to attract sellers and grow their platform.

mjparrott 5y ago
Companies break contracts all the time. The consequences range and can include legal action, hurt relationships, lost business ... but also could be minor ('business is business').
- akira2501 5y ago
  > Companies break contracts all the time. Which is an excellent reason for preventing these types of monopolies from forming in the first place. Once you let one retailer get so large, they have almost unlimited power to act in this way, but the people who they harm have very little power in receiving any recompense for it. > The consequences range They sure do.. and Amazon is one of the largest companies operating today. The range is "off-scale high."
- Gibbon1 5y ago
  There is breaking contracts in minor often mutually agreed ways, or because 'can't do it'. Happens all the time. Stealing your customers sales metrics, yeah that's never okay.